Gazprom’s subsidiaries are withdrawing petitions to FAS with regard to acquisition of 50% + 1 share in SUEK
Gazprom’s subsidiaries are withdrawing the petitions to the Federal Antimonopoly Service with regard to the acquisition of a 50 per cent plus one share stake in SUEK.
The uncertainty about the behavior of the electric power and capacity market, the scope of investment programs in the power sector and the development of network infrastructure makes it difficult to provide a precise and consistent evaluation of the company’s market potential. At the same time, the fulfillment of the proposed structural and behavioral requirements for Gazprom and SUEK would considerably hinder the implementation of the company’s projected strategy.
To this end, Gazprom and SUEK’s shareholders decided to stop the talks about the power and coal asset merger based on SUEK and to focus on their own strategies in power generation.
At the same time, the joint work done to structure the deal and develop the strategy confirms the potential for a coal fired power generation development program to be implemented in Russia. Taking into account the importance of the tasks in relation to the fuel balance optimization in Russia’s power sector, Gazprom and SUEK entered into a Strategic Partnership Agreement stipulating the coordination of the companies’ actions in the power industry. The Agreement identifies the directions for long-term cooperation between the companies, incl. upgrading and construction of new modern coal fired power generating capacity, joint investments in coal fired generation, gas substitution and increased coal consumption at power plants, development of innovative projects in coal fired generation and a range of other joint projects.
The Agreement on Strategic Partnership between Gazprom and SUEK identifies the following key directions of cooperation for the purpose of optimizing the fuel balance of Russia’s power sector:
- Joint development and execution of projects for gas & coal fired power plant conversion to coal provided SUEK guarantees fuel deliveries;
- Supply of SUEK’s coal to coal fired plants of generating companies in which Gazprom holds controlling stakes;
- Interaction for optimized loading of coal and gas fired plants controlled by Gazprom and SUEK with a view to reducing gas consumption;
- Optimization of electricity supply to Gazprom’s companies with the use of SUEK’s generating capacity;
- Joint investments in new coal fired power blocks and plants;
- Interaction when acquiring new power assets;
- Interaction when implementing international partnership projects in the power sector;
- Joint development of a position for discussion with the electricity market regulatory and selfregulatory bodies;
- Joint investments in ash utilization at coal fired plants and its use for cement and building material production;
- Joint development and execution of projects for advanced processing of coal (incl. into coal chemicals, liquid fuels, syngas).
- Joint support of R & D in the area of promising coal fired generation technology.